BAM Key Details:

  • Q3 financial reports are in for the biggest names in real estate, with substantial gains for some and significant losses for others. 
  • Real Brokerage and Redfin both reported tech innovations to simplify the buying/selling process, help clients from start to close, and support agents in their operations and, in Real’s case, financial planning. 

It was a busy third quarter for the real estate industry. It hasn’t all been about lawsuits, scandals, and PR disasters. 

We now have Q3 2023 financial updates for the following companies: 

  • Real Brokerage
  • Compass
  • Opendoor
  • Redfin
  • RE/MAX
  • eXp
  • Zillow
  • CoStar
  • Anywhere 
  • Offerpad
  • Black Knight 

A few acronyms to keep in mind: 

  • GAAP = generally accepted accounting principles
  • EPS = earnings per share
  • EBITDA = earnings before interest, taxes, depreciation, and amortization
  • BPS = basis points (100 bps = 1% change; 0.01bps = 1% change)

Read on for the highlights. 

Real Brokerage

Real Brokerage hosted the Real RISE 2023 event in October—not long after the close of an encouraging third quarter. 

Q3 financial highlights: 

  • Revenue: $215 million—up 92% year over year. 
  • Adjusted EBITDA: $3.5 million—up more than 500% year over year
  • YTD Adjusted EBITDA: $5.3 million
  • Agent count grew to 12,175 at the end of Q3 (+81% year over year)
  • Transaction count grew to over 20K (+82% YOY)
  • Gross margin of 8.7% increased 100bps YOY due to improvements in Real’s fee structure. 
  • Unrestricted cash and equivalents balance increased by $5 million to $33 million—from $28.1 million at the end of Q2 2023. Operating cash flow was reported as -$7.9 million, but this was due a $13 million reduction in restricted cash. 

Real also announced new product innovations, including— 

  • Its customer-facing “One Real” mortgage app, designed to simplify the home buying/selling process with rapid mortgage pre-approval and closing features
  • The “Real Wallet” bespoke fintech platform for agents to centralize the functionality of a debit card and credit card, enabling agents to use their commission dollars to earn rewards points and perks. 
  • Leo 2.0—Real’s first-to-market AI concierge with predictive technology to support agents, reducing the need to hire additional full-time support staff. 

The third quarter marks another significant achievement for Real. We generated record revenue, a second consecutive quarter of positive adjusted EBITDA, and expanded our agent base to 12,175. We remain an outlier in our industry, continuing our track record of significant growth despite challenging end market conditions. The investments we are making into our business will continue to distinguish our platform from peers, and we remain laser focused on building solutions that we believe will fundamentally transform the real estate buying and selling experience. I was thrilled to bring this vision into sharper focus at our annual RISE agent conference in October, where we unveiled our One Real consumer app, introduced a groundbreaking agent-focused financial suite called Real Wallet, and showcased a range of innovative products and services designed to further support our agents and their clients.

Tamir Poleg

Real Brokerage CEO

Compass

Compass saw a 10% annual drop in revenue but significant improvements in net loss, adjusted EBITDA, and operating cash flow. 

Q3 financial highlights: 

  • Revenue: $1.34 billion—down 10% year over year, primarily due to a 12% annual drop in transactions. 
  • GAAP Net loss: $39 million—a 74% improvement from $154 million in Q3 2022. Net loss for this year includes non-cash stock-based compensation costs of $38 million and depreciation and amortization of $21 million. 
  • Adjusted EBITDA (a non-GAAP measure): $22 million—up $64 million from $(42) million in Q3 2022. 
  • Operating cash flow & free cash flow (a non-GAAP measure): Operating cash flow was $15 million; free cash flow was $12 million, considering capital expenditures. 
  • Cash and cash equivalents: $220 million at the end of Q3, with no draw of their revolving credit facility. 

In the third quarter, for the second quarter in a row, Compass is free cash flow positive as we continue to execute our plan to drive operating expenses down while continuing to grow our agent count and expanding the features on our technology platform, the industry’s only proprietary first-contact to close platform. Additionally, at a time when many agents are leaving the industry, Compass reached its second highest quarterly retention rate since going public and our national market share was up 26 basis points year-over-year.

We expect to achieve our $900 million annualized non-GAAP operating expense run rate in Q4 2023. For 2024, we continue to identify efficiencies in the business and are targeting $850 million annualized non-GAAP operating expense, the bottom of our previously stated range of $850 million to $950 million. At these reduced levels, we believe we will still be able to continue to grow agent count and invest in building upon our technology advantage. Although the market is worse now than a year ago, Compass is a much stronger company with a lower cost base, better agent retention, revitalized post pandemic culture, enhanced technology platform, and a larger agent-to-agent client referral network. As we enter 2024, we believe we have positioned Compass for significant upside when the market recovers in the future.

Robert Reffkin

Founder and CEO of Compass

Opendoor

Opendoor saw significant declines in revenue, inventory, homes purchased and homes sold, along with gains in gross profit and improvements in net loss. 

Q3 financial highlights: 

  • Revenue: $980 million—down (71)% from Q3 2022 and down (50)% from Q2 2023
  • Total homes sold: $2,687—down (68)% from Q3 2022 and down (50)% from Q2 2023
  • Gross profit (loss): $96 million—up from $(425) million in Q3 2022 and down from $149 million in Q2 2023
  • Gross margin: 9.8%—up from (12.6)% in Q3 2022 and up from 7.5% in Q2 2023
  • Net (loss) income: $(106) million—up from $(928) million in Q3 2022 and down from $23 million the previous quarter (Q2 2023). 
  • Adjusted net loss: $(75) million—an improvement from $(328) million in Q3 2022 and from $(197) million in Q2 2023.
  • Contribution profit (loss): $43 million—up from $(22) million in Q3 2022 and up from $(90) million in Q2 2023. Contribution margin: 4.4%—up from (0.7)% in Q3 2022 and (4.6)% in Q2 2023. 
  • Adjusted EBITDA: $(49) million—compared to $(211) million in Q3 2022 and $(168) million in Q2 2023. Adjusted EBITDA margin: (5.0)%—compared to (6.3)% in Q3 2022 and (8.5)% in Q2 2023. 
  • Inventory balance: $1.3 billion, representing 4,007 homes—down (78)% from Q3 2022 and up 14% from Q2 2023. 
  • Homes purchased: 3,136—down (63)% from Q3 2022 and up 17% from Q2 2023.

Our third quarter results were in-line or ahead of our prior guidance driven by our continued focus on delivering operational excellence through pricing improvements, cost savings, and risk management. The third quarter also marked our return to positive contribution margin. These results demonstrate our continued strong execution and market share gains in what remains an uncertain U.S. housing market. With an improved cost structure, strong balance sheet, and scaled customer acquisition channels, we believe we have laid the foundation to emerge from this cycle more resilient and well-positioned for continued share gains and long-term profitability.

As the market leading platform that is leveraging technology to transform and simplify the way people buy and sell their home, we have a significant opportunity ahead of us and remain steadfast in our mission to power life’s progress, one move at a time.

Carrie Wheeler

Opendoor CEO

Redfin 

Redfin saw drops in revenue and real estate services gross profit, along with improvements in gross profit, net loss, market share, and the reach of their mobile apps and website. 

Q3 financial highlights:

  • Revenue: $269.0 million—down 12% from Q3 2022.
  • Gross profit: $98.3 million—up 8% year over year
  • Real estate services gross profit: $54.1 million—down 2% year over year. Real estate services gross margin was 30%—up from 26% in Q3 2022. 
  • Net loss: $19.0 million—an improvement from $90.2 million in Q3 2022. 
  • Net loss attributable to common stock: $19.3 million. Net loss per share attributable to common stock, diluted: $0.17—an improvement from $0.83 in Q3 2022. 
  • Market share: 0.78% of U.S. existing home sales by units—up from 0.75% in Q2 2023. 
  • Reach of Redfin’s mobile apps and website: over 51 million average monthly users—up 1% from Q3 2022. 
  • Mortgage cross-selling attach rate: 18%, despite strong headwinds
  • Loyalty sales: 36% of sales came from loyalty customers in Q3 2022—up from 34% in Q3 2022. 

Redfin also introduced the following in Q3 2023:

  • A new construction partnership that will add thousands of (newly built) listings to Redfin and provide users with more detailed information on newly constructed homes and communities. 
  • The addition of wind risk data to home description pages, making Redfin the first real estate brokerage to add this information for nearly every for-sale home in the U.S. 
  • Software to improve customer and agent experience
  • Launching a new design system for rental detail pages—improving visual appearance and increasing user engagement—and for the home tour checkout process
  • Improved call filters on their customer service line—allowing sales advisors to spend more time helping high-intent callers. 
  • Simplified Redfin Estimate section for off-market home detail pages, making it easier for homeowners to find the information they seek and increasing seller contacts by 5%.

In a worsening housing market, Redfin earned an adjusted EBITDA profit, a $59 million improvement over the third quarter of 2022, all while growing traffic and gaining share. In October, we raised capital, began generating revenues from a new digital business, and launched all-variable agent pay in California. This downturn has only made us stronger.

Glenn Kelman

Redfin CEO

RE/MAX 

RE/MAX saw drops in total revenue and adjusted EBITDA, along with improvements in total agent count and open Motto Mortgage franchises. 

Q3 financial highlights:

  • Total revenue: $81.2 million—down 8.7% from Q3 2022. 
  • Revenue excluding marketing funds: $60.4 million—down 8.8% from Q3 2023, due to negative 8.2% organic growth and adverse movements of 0.6% in foreign currency. 
  • Net loss attributable to RE/MAX Holdings, Inc.: $59.5 million. Net loss per diluted share (GAAP EPS): $3.28
  • Adjusted EBITDA: $26.7 million—down 15.0% from Q3 2022. Adjusted EBITDA margin: 32.9%. Adjusted earnings per diluted share (Adjusted EPS): $0.40
  • Total agent count: 145,309 agents—up 0.7% from Q3 2022
  • U.S. and Canada combined agent count: 81,782—down 3.9% year over year
  • Total open Motto Mortgage franchises: 242 offices—up 14.7% year over year

We continue to make progress driving forward our core strategic initiatives amid the toughest real estate market in a decade. We remain focused on aggressively pursuing agent growth opportunities – teams and conversions, mergers and acquisitions – in the U.S., increasing our Canadian and global agent counts, and growing our mortgage business.

In the third quarter, we also made two difficult but necessary moves in the current environment. First, we streamlined our operations and our cost structure. Second, we entered into a settlement to end costly litigation and protect the Company and RE/MAX network from multiple industry class-action lawsuits. Ultimately, we believe we will successfully navigate these challenging times and grow significantly when industry conditions improve – a pattern we’ve seen repeatedly for 50 years. The strength of our brands and networks are unmatched in many ways, and we believe our future is very bright.

Steve Joyce

RE/MAX Holdings Chief Executive Officer

eXp 

eXp World Holdings saw annual drops in revenue, gross profit and cash/cash equivalents, along with increases in agent count, international realty revenue, and adjusted EBITDA. 

Q3 financial highlights:

  • Agent count: 89,000 in 24 global markets—up 5% from Q3 2022. 
  • International realty revenue increased 47% year over year to an all-time record. 
  • Revenue: $83.6 million—down 2% year over year. 
  • Gross profit: $83.6 million—down 10% year over year
  • Net income: $1.3 million. 
  • Earnings per diluted share: $0.01—down from $0.03 in Q3 2022. 
  • Adjusted EBITDA (a non-GAAP financial measure): $19.0 million—up 53% YOY
  • Adjusted operating cash flow (a non-GAAP financial measure): $56.8 million
  • Cash and cash equivalents (as of September 30, 2023): $120.1 million—down from $121.6 million at the end of Q4 2022. The Company repurchased roughly $55.9 million of common stock in Q3 2023. 
  • eXp paid a cash dividend for Q3 2023 of $0.05 per share of common stock on September 4, 2023. On October 25, the Company’s Board of Directors declared a cash dividend for Q4 2023 of $0.05 per share of common stock, expected to be paid on November 30, 2023 to stockholders of record on November 16th. 

During the third quarter, we continued to focus on agent-centric innovation that drove meaningful results, as we once again increased eXp’s agent Net Promoter Score (aNPS) while extending our market share gains. In a slower market environment where every transaction counts, eXp’s agents in the U.S. significantly outperformed the market during the third quarter. This outstanding performance speaks to the differentiated nature of eXp’s platform and the power of our unique, success-oriented culture. 

Moving forward, we see many opportunities to further iterate on our agent-centric value proposition with programs like Boost, Accelerate, Thrive, and eXp exclusives and partnerships with Opendoor and the HomeRiver Group. Internationally, we recently announced a partnership with HomeHunter Global. All of this ultimately empowers our agents to spend more of their time on revenue-generating opportunities. We continue to believe that our investments in agent success are the key to driving superior growth over the long term.

Glenn Sanford

Founder, Chairman, and CEO of eXp World Holdings

Zillow

Zillow Group’s financial results for Q3 2023 exceeded the company’s expectations for revenue and adjusted EBITDA. 

Q3 financial highlights:

  • Revenue: $496 million—up 3% year over year and rising above the midpoint of Zillow’s outlook range by $24 million. 
  • Residential revenue: $362 million—exceeding both the industry’s total transaction dollar decline of 14% and the high end of Zillow’s expectations for Q3, decreasing 3% year over year. 
  • Rentals revenue: $99 million—up 34% year over year, primarily due to multifamily revenue, which increased 42% year over year. 
  • Mortgages revenue: $24 million—down 8% year over year, primarily due to higher interest rates that cooled mortgage demand. 
  • Purchase loan origination volume increased 88% year over year. 
  • Net loss, on a GAAP basis: $28 million
  • Adjusted EBITDA: $107 million—$30 million above the midpoint of the company’s outlook range, mainly due to strong rentals revenue, higher-than-expected residential revenue, and lower-than-expected operating expenses. 
  • Cash and investments: $3.3 billion—flat compared to the end of Q2, after $100 million in share repurchases in Q3. Available repurchase authorization: $914 million at the end of Q3
  • Total traffic to Zillow Group’s mobile apps and websites: 224 million average monthly unique users—down 5% year over year. Visits in Q3: 2.6 billion—down 5% YOY.

Zillow also announced its agreement to acquire Follow Up Boss for $400 million in cash upon closing and up to $100 million in cash earnouts over a three-year period. 

Despite a residential real estate industry that is down 14% from last year, Zillow is reporting positive growth: 3% in our total revenue, 34% in our rentals revenue, and 88% in our purchase mortgage origination business. We have strong momentum across the board, and it’s because we’re focused on building a better, more integrated real estate transaction experience for both movers and partners.

Rich Barton

Zillow co-founder and CEO

CoStar 

CoStar announced gains in revenue and net income for Q3 2023. 

Q3 financial highlights:

  • Revenue: $625 million—up 12% from $557 million in Q3 2022
  • Net income: $91 million—up 25% year over year
  • Profit margins near 40%
  • Adjusted EBITDA: near $1 billion annualized
  • Net new bookings: $65 million
  • Unique visitors to Homes.com increased 1,290% year over year—far exceeding competitor traffic, the largest of which were relatively flat or on the decline. 

We are investing aggressively, but prudently, in Homes.com with the goal of unlocking the enormous potential of becoming the leading, successful U.S. residential real estate portal. In September we celebrated a major milestone on that road to success with 100 million unique visitors to Homes.com.

CoStar Group delivered strong results this quarter on our two principal fronts…We believe that the competitive balance in the industry is shifting in our favor. Our key competitors’ sites combine rentals and resale homes, so when we likewise combine our Homes.com and Apartments networks we had 140 million unique visitors in September, according to Google Analytics. In the past year we have quickly grown to become the second most heavily trafficked residential network by a wide margin, with monthly unique visitors 35% higher than Realtor.com and 90% higher than Redfin in September, according to ComScore. We continue to build out the full potential of Homes.com and are focused on continuing to grow traffic and beginning monetization in the second quarter of 2024.

Last week, we announced our offer to acquire OnTheMarket, one of the top three residential property portals in the United Kingdom. Having operated successfully in the United Kingdom for two decades, we believe that we can grow competitive traffic share in the U.K. just as we have done so many times before in the U.S. and that our significant software investments into Homes.com will give us technology scale advantage in the U.K.

Andy Florance

Founder and CEO of CoStar Group

Anywhere 

Anywhere (fka Realogy) reported annual declines in revenue and operating EBITDA, along with cost savings and debt reduction. 

Q3 financial highlights:

  • Revenue: $1.6 billion—down 12% year over year, primarily due to home sale transaction declines of 13% compared to a year ago. 
  • Net income: $129 million
  • Operating EBITDA: $107 million—down $59 million from Q3 2022. 
  • Debt reduction: $281 million through successful debt exchange, open market bond repurchases, and partial repayment of their revolver balance. 
  • Cost savings: approximately $60 million for Q3 2023 and over $160 million year to date. Completed actions to deliver $200 million for the full year (2023). 
  • Free cash flow: $95 million
  • Commission splits in Q3 increased 55 basis points year over year (+0.55%)

Other Q3 highlights:

  • Along with RE/MAX, Anywhere agreed to a nationwide settlement in the Sitzer/Burnett, Moehrl, and Nosalek antitrust lawsuits. 
  • Forbes recognized Anywhere as a World’s Best Employer, while TIME Magazine declared it one of the World’s Best Companies. 

Anywhere led through a difficult housing market to deliver considerable profitability and achieve substantial debt reduction. We accelerated our strategic progress, including expanding our high-margin franchise business, integrating the consumer transaction experience, taking advantage of the better competitive environment, and putting significant litigation behind us, to set Anywhere up for powerful momentum as the housing market improves.

Ryan Schneider

Anywhere president and CEO

Anywhere stayed focused on what we can control and drove differentiated results in the third quarter. We generated meaningful Operating EBITDA, overdelivered on our cost savings agenda, achieved sizable debt reduction, and prudently managed our cash, enabling Anywhere to navigate current market conditions and invest to drive future success.

Charlotte Simonelli

Anywhere executive vice president, chief financial officer, and treasurer

Offerpad

Offerpad reported Q3 gains in revenue and homes purchased and sold, and gross profits, along with a quarterly improvement in net loss. 

Q3 financial highlights: 

  • Revenue: $234.2 million—up 2% from the previous quarter. 
  • Net loss: $20 million—an 11% improvement from $22.3 million in Q2 2023
  • Homes purchased: 930—up 11% from 840 in Q2 2023. 
  • Homes sold: 703—up 8% from 650 in Q2 2023. 
  • Gross profit: $24 million—up 8% from $22.2 million in Q2 2023. 
  • Adjusted EBITDA: $13.3 million—down 23% from $17.3 million in Q2 2023. 

We are pleased that we met both top and bottom-line expectations in the third quarter, despite a continued difficult macro environment. We are particularly proud of our expanding contribution margin. We have proven we can perform in a difficult market, and we have exciting opportunities ahead of us. We are well positioned for further solid performance in 2024 as we take the friction out of real estate.

Brian Blair

Offerpad Chairman and CEO

Black Knight

Black Knight, Inc. reported annual declines in earnings and sales, with an annual increase in net loss. 

Q3 financial highlights:

  • Sales: $275 million—down from $291.8 million in Q3 2022. 
  • Net loss: $1,336.9 million—compared to net income of $30 million in Q3 2022. 
  • Year-to-date sales (Jan–Sep 2023): $840.2 million—down from $881.8 million for the first nine months of 2022. 
  • Year-to-date net loss: $1,139.8 million—compared to net income of $434.9 million for the first nine months of 2022. 

Intercontinental Exchange, which completed its strategic acquisition of Black Knight, Inc. on September 5, 2023, reported the following financial results for Q3 2023:

  • Record net revenues of $2.0 billion—up 11% year over year
  • GAAP diluted earnings per share (EPS): $0.96
  • Adjusted diluted earnings per share: $1.46
  • Operating income: $845 million—down (7)% year over year
  • Adjusted operating income: $1.2 billion—up 10% year over year
  • Operating margin: 42%; adjusted operating margin: 59%